226
AFRICA
’
S SILK ROAD
:
CHINA
AND INDIA’
S NEW ECONOMIC FRONTIER
Conclusions and Policy ImplicationsSummary of Main FindingsThe basic diagnostics of
behind-the-border conditions, based on the
WBAATI survey data, find that surveyed larger firms outperform surveyed smaller firms both in productivity and exports. Among the surveyed firms,
export propensity is lower for domestically owned firms than for Chinese or Indian firms.
An assessment of the sources of competition in these African markets at the
country level suggests that, not only do imports play an important role,
but so do low domestic entry and exit barriers, the incidence of FDI in the market, and access and integration into global production networks.
Not surprisingly, firm turnover is found to be more prevalent among smaller businesses, while larger firms enjoy longer tenure and higher market shares. Again, this is true regardless of firm nationality. The data suggest that entry via FDI is an important channel through which competition is introduced into these surveyed African markets, a finding consistent with research on other regions of the world. International integration into production networks—the focus of chapter particularly upstream in the value chain, appears to stimulate competition among the surveyed firms.
The evidence from the degree of competition among different nationalities of firms indicates a clear role played by Chinese and Indian investors in fostering domestic competition in African markets. In fact, a mutually reinforcing effect is found African firms that
face more competitive mar-TABLE 4.7
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